Sprint Just Ditched 2-Year Contracts And Now AT&T Is All Alone

The wireless market led by T-Mobile is starting to look a lot more like the UK market. First T-Mobile ditched contracts, then Verizon announced two weeks ago that it was also ending two-year contracts, and now Sprint Wireless has followed suit.

Under Sprint’s new program customers will either have to pay full price for a smartphone upfront or pay the full cost for their smartphone over a two-year period.

Two-year contracts have seemed like a good deal for customers because of discounted smartphones. For example, Apple sells its iPhone series for approximately $650 per device, while AT&T offers the device to customers for just $199. The company then bakes that pro-rated amount into your two-year contract.

In theory, by removing the discounted phone price and eliminating contracts, wireless carriers can lower their monthly bills, allowing customers to receive more transparency in their statement.

AT&T is now the only nationwide carrier to offer two-year contracts. As more company’s eliminate those contracts, it should increase competition as each wireless carrier tries to offer discounted rates to grab customers who are no longer tied to a wireless contract.

Sprint Wireless has already attempted to lure customers by cutting their Verizon and AT&T bills n half if they switch, and offering the cheapest iPhone plan among the biggest four cell phone carriers.

This week Sprint announced a new plan that gives customers an iPhone 6 with unlimited data for $75 per month, after trading in an old smartphone. Despite efforts to attract new customers Sprint has now fallen to fourth place in the wireless market, losing much of its ground to T-Mobile.

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.